Heteronomics Archive

December 11, 2025

SNB: Zero Rate, Rising Policy Dilemmas

The SNB holds its policy rate at 0% in line with consensus. Markets now expect a prolonged pause, with little chance of negative rates in the near term.
Despite near‑zero inflation, the SNB’s medium‑term forecasts justify keeping rates on hold, pointing to 0% policy rates well into 2026.
Future rate moves hinge on franc strength, global trade risks and inflation persistence, with FX intervention preferred over renewed negative rates.

September 25, 2025

SNB holds at 0% as expected, pausing after six cuts. Inflation at 0.2% provides a stability buffer despite US tariff economic headwinds.
Growth outlook deteriorates with 2026 forecast cut to "under 1%" as machinery and watches are hit hardest by 39% US tariffs impacting exports.
A high bar to negative rates is maintained, despite CHF strength and unemployment rising. Service sector resilience limits immediate easing pressures.

June 19, 2025

The SNB lowered its policy rate to 0% as expected, responding to declining inflation and subdued price pressures, with the latest forecasts indicating inflation will remain well within the price stability range through 2027.
The SNB’s guidance remains cautious, highlighting global trade tensions, external risks, and persistent uncertainties as key factors shaping the interest rate outlook.
Future policy decisions will be data-driven, with the SNB prepared to adjust rates further or intervene in currency markets if inflation deviates from target or if external shocks intensify.

March 20, 2025

The SNB lowered its policy rate by 25bps to 0.25%, in line with expectations, citing low inflation and downside risks to price stability. Inflation is projected to remain within the central bank’s target range, reducing the need for aggressive monetary easing.
Switzerland’s economy remains resilient, with solid Q4 2024 growth, but global uncertainties—including geopolitical tensions and trade risks—could pose challenges. Domestic demand is expected to benefit from rising real wages, while weak foreign trade may dampen overall growth.
Future policy decisions will be data-dependent, with the SNB closely monitoring inflation and external conditions. While further easing is possible, ongoing global inflationary pressures and fiscal stimulus in Europe could influence the central bank’s stance.